Siemens PC sale falls through as Acer fails to meet asking price

Siemens Nixdorf has cancelled the proposed sale of its PC manufacturing business to Acer, citing unacceptable terms proposed by the Taiwanese manufacturer.

The surprise ending of negotiations about the sale of the 2,000 worker factory, begun in April, was put down to Acer being forced to restructure its operations because of the impact of the Asian economic crisis.

Acer was not willing to meet Siemen's minimum asking price because of concerns in the Taiwanese company that it would not sell sufficient numbers of PCs, given current economic conditions, to get a good return on the investment.

"Acer's primary reason for the halt in negotiations is due to concern aroused by the financial crisis raging throughout Asia as well as Russia, causing the Taiwanese PC manufacturing giant to exercise real cautiousness in investment planning," the company said in a statement.

The company said it would focus its finances on the struggling Semiconductor Business Group. The Group overall has already slashed its profit forecast for the year by a third.

The collapse of the deal throws a real spanner in the works for Siemen's own restructuring program. The company said it had not ruled out finding another buyer and would spin off the manufacturing operation into a private company, to be renamed PCS, under the auspices of its information services and communications division.

On the bright side the company claimed PC sales for the year were expected to be 20 per cent ahead of expectations at the time the Acer negotiations were begun in April, reaching nearly #2 billion.

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